The mysterious company refuses to reveal their owners and hoards a tremendous amount of foreign currency. Insights from german newspaper WELT in this curious business.
Only now and then does the Russian oil company Surgutneftegaz make a name for itself. But then all of a sudden and quite sensational, to remind everyone again, as it were, that he does exist after all. Most recently in mid-November of this year. The stock soared 49 percent in three days. That would be extreme for a young company that has become the plaything of speculative investors. And it is even more so with a traditional company.
But Surgutneftegaz with its 111,800 employees is no ordinary case. The group, which accounts for eleven percent of all Russian oil production and seven percent of oil processing, is different. Although the third largest oil company in the country, it still poses great puzzles to this day.
The biggest: Why is Surgutneftegaz, based in the West Siberian lowlands on the Ob River, hoarding so much free money? And on foreign exchange accounts, which at least bring stable interest income and thus contribute a whopping 20 percent to earnings before taxes and over 40 percent to free cash flow.
The bottom line is now 3.8 trillion rubles (46 billion euros). That is 82.5 billion rubles more than at the end of the second quarter. Certainly, compared to a US technology company like Apple, that's just a quarter. But within Russia and within the classic industrial sector also across Europe, there is hardly any company that could even come close to Surgutneftegaz in this respect.
For the market and its experts, it is and remains largely incomprehensible what this financial behavior and this strategy are actually supposed to be. All the more so since the group - apart from the quarterly company figures, to which it is obliged due to the stock exchange listing - discloses almost no information about itself.
The analysts of the Russian investment company BKS recently stated succinctly in a comment for the business portal RBK.
A few years ago, Vladimir Bogdanov, who took over the management of the once state oil company at the age of 33 at the time of the Soviet perestroika in 1984 and retained it after its privatization in 1993 together with his manager colleagues, once suggested that the reason for the - almost obsessive - frugality lay in the extreme hardship of the 1990s.
“This money is a security mechanism,” the now 70-year-old replied to a question at a shareholders' meeting. “Nobody knows what will happen to the oil price. We need the money so that our workforce can live quietly. Because what will we do if a situation like 1998 occurs again? ”At that time, the ruble crash caused turmoil.
Bogdanov is estimated by Forbes magazine to have a fortune of two billion dollars and is also called the "Siberian hermit" because of his seclusion and media aversion.
“This money is a security mechanism,” the now 70-year-old replied to a question at a shareholders' meeting. “Nobody knows what will happen to the oil price. We need the money so that our workforce can live quietly. Because what will we do if a situation like 1998 occurs again? ”At that time, the ruble crash caused turmoil.
Bogdanov is estimated by Forbes magazine to have a fortune of two billion dollars and is also called the "Siberian hermit" because of his seclusion and media aversion.
Accordingly, Bogdanov's statement, which is supposed to come across as sympathetic, is anything but plausible for the market. Let alone satisfying.
Over the years, the "hermit" Bogdanov, who like many top Russian business representatives and politicians has been on the US sanctions list since 2018, has managed to disguise the real owners of Surgutneftegaz despite being listed on the stock exchange.
Even in 2009, when the group bought 21.1 percent of the Hungarian gas company Mol in its only attempt to expand abroad and Mol demanded disclosure of the real owners, Bogdanow remained tough: he simply gave up his involvement with Mol after a short time.
All of this has led to a lot of speculation and conflicting information over the years. The group itself stated in 2005 that 15.7 percent of the shares were held by ING-Bank and 7.7 percent by the International Bank of Moscow.
The Moscow political scientist Stanislaw Belkowskij leaned furthest in his speculations, and he said in an interview with WELT at the end of 2007: “Putin is also a great businessman. He controls 37 percent of the shares in Surgutneftegaz ”.
This assessment is largely correct, according to the British magazine "Times" once confirmed by the US secret service CIA under US President George Bush. Putin himself, on the other hand, made it clear in the meantime that many of the shares in Surgutneftegaz are simply held by the people who work there.
Nobody believes that the oil company really leads its own life and is not close to the Kremlin. On the one hand, the oil trader Gunvor, who was half held for a long time by Putin's Petersburg intimate and businessman Gennady Timchenko, owes its establishment to its proximity to Surgutneftegaz.
On the other hand, there has always been a strict ban in Russia's financial circles on using financial instruments such as derivatives on the Surgutneftegaz share, WELT learned some time ago from an investment banker with an assurance of anonymity. This shows that the company is something special for the Russian rulers and that it is controlled from the very top.
So the public didn't really get any further on the subject of ownership over the years. And the fact mentioned at the beginning that the Surgutneftegaz share suddenly went through the roof in November and the daily trading volume in Moscow meanwhile rose a whopping 3900 percent, while the overall market fell in double digits in November, was not clarified.
There is talk in the Moscow investment scene that Surgutneftegaz could participate in a major acquisition or merger with his fat financial pillow. Such speculation is not new, of course. There was a rumor once before that Surgutneftegaz could swallow the second largest and private Russian oil company Lukoil - the epitome of transparency compared to Surgutneftegaz. The share soared back then too. But both companies denied it.
Another explanation for the stock's jump in November is that the ruble fell over five percent against the dollar in November, and the subsequent revaluation of Surgutneftegaz's foreign exchange accounts suggests an increase in corporate earnings.
In the first nine months of the year, sales were positive, but the bottom line was that profits fell by two thirds to 297 billion rubles (3.6 billion euros), which was partly due to the relative strength of the ruble, which was unfavorable for the company.
The company's shares could rise 400 percent if it finally implemented a substantial reform in its corporate governance, wrote Ronald P. Smith, oil and gas analyst at BCS Global Markets in Moscow, recently. The curiosity is that the market capitalization of the group is only half as high as the fat financial pillow on the accounts.
The three reforms mentioned by Smith include, on the one hand, shifting the notorious financial cushion into more lucrative asset classes or distributing it, and on the other hand, bringing order to the rumored “phantom” of high state participation.
